Slack joining forces with a beast like Salesforce would address a lot of these issues, rather quickly. SAN FRANCISCO Salesforce said on Tuesday that it would buy the workplace software company Slack for $27.7 billion in cash and stock, the latest in a wave of deals as the coronavirus pandemic boosts demand for tools that enable people to work remotely. Adobe said last month that it planned to acquire the work force management software company Workfront for $1.5 billion. Business software pioneer Salesforce.com is buying work-chatting service Slack for $27.7bn in a deal aimed at giving the two companies a better shot at competing against longtime industry. The company has its headquarters at Salesforce Tower in San Francisco. Selling your company for 27 Billion is a win in the books I read. IBM has built their entire Customer 360 on Salesforce and now has more than 530,000 customers, 380,000 employees and 50,000 partners using our platform. Salesforce is the dominant player in customer relationship management software, where Microsoft is a distant challenger. Slacks revenue will be a tiny drop in the bucket for Salesforce. Slack will continue to operate under the Slack brand, driving forward a continued focus on its mission, customers, and community. Joining forces gives both Slack and Salesforce a much stronger proposition. Unlike so many cloud companies, namely Zoom and RingCentral, Slack has not seen a COVID-induced revenue boost this year and I'm sure that has contributed to its agreeing to be acquired. Meantime, despite impressive growth this year in paid customers amidst the pandemic notably among large corporations and a host of new innovations to retain existing clients, Slack still expects to post a net loss this fiscal year. The stock was priced at around $25 for the past few months. Fast forward to 2020 and Salesforce is expected to announce after markets close Tuesday that it will acquire Slack at a premium in a mixed cash and stock deal, according to a CNBC report. wrote in a report, We have been surprised by the limited success Slack has seen from the pandemic and the rise of remote work. But they aren't adding new products or upsells at anything close to the rate earlier in the year. Were not in a good M&A environment, he said, referring to mergers and acquisitions. Its biggest competitor, Microsoft Teams, says it has 115 . "This deal will be a major shot across the bow at Microsoft," wrote Dan Ives, an analyst at Wedbush, in a report on Monday. it would buy the workplace software company Slack, it planned to acquire the work force management software company Workfront. Salesforce ( CRM) is getting some big work done before year-end. So, the results are already quantifiable. "Stewart [Slack CEO Stewart Butterfield] and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it, said Marc Benioff, Salesforce chairman and CEO. Salesforce ( CRM 0.73%) recently agreed to purchase workplace collaboration platform Slack ( WORK) in a $27.7 billion deal, making it the company's largest acquisition yet. How? Salesforce's $27.7 billion acquisition of Slack closed after passing DOJ scrutiny last week. SaleForce might have made an offer in the $35 range, and after much negotiation SalesForce and Slack's board of directors agreed on the price of around $44 per share. The stock, which opened at $38.50, has been on a roller coaster since, trading near $17 in March of this year, before climbing back close to $40 in June and then dropping back below $25 in mid-November. Salesforces board should look harder at finding a successor for Benioff. It has collaborative tools. Demand for Slacks products, which allow people to communicate and collaborate with one another, has increased as people work from home during the pandemic. Salesforce.com Inc. agreed to buy Slack Technologies Inc. for $27.7 billion in cash and stock, giving the corporate software giant a popular workplace-communications . I just dont see it.. Salesforce (NYSE: CRM), the global leader in CRM, today announced it has completed its acquisition of Slack Technologies, Inc. "We couldn't be more excited to have Slack as part of the Salesforce family, combining the #1 CRM and the trailblazing digital platform for the work anywhere world," said Marc Benioff, Chair and CEO of Salesforce. It's a mission-critical app, and one that in the enterprise is really a 10-year commitment. Mr. Butterfield will continue leading Slack, which will become an operating unit of Salesforce. The total enterprise value of the proposed acquisition has been pegged at $27.7 billion. At the data layer, Mulesoft and Customer 360 enable enterprises to unify data within Salesforce and make it available to other layers of the stack. look to roll up the fragmented market for collaboration tools. On the company's earnings call Tuesday, Benioff said that Salesforce believed it could help Slack reach the next critical stage of revenue growth. Salesforce is making the biggest acquisition in its 21-year history. The biggest was IBM's $34 billion purchase of Red Hat in 2018, followed by Microsoft's $27 billion acquisition of LinkedIn in 2016. Salesforce is now in talks about buying Slack, setting up a showdown with Microsoft that could shape the way software is used by many of the world's office workers. Walmart CEO: the lack of stimulus is taking its toll, Senator Ted Cruz: big tech is drunk on power, Shark Tank star Kevin OLeary: people need to save more money, IBM CEO: heres why we just made a landmark business move, Home Depot co-founder and Atlanta Falcons owner gives his best advice to new NY Mets owner, Peloton founder: heres one of my biggest 15 year goals, Kraft Heinz CEO: Buffetts team like our $3.2 billion deal, Kroger CEO: this is how we see the future of food shopping. It seems to me that there is no coincidence in the timing of the announcement of this deal on the same day as Salesforce announced earnings which featured slowing revenue growth. said Tuesday after market close that it would acquire, Coffee Consumption Seen Rising Only Modestly in Next Few Years, Dollar Up, Stocks Down as Traders Eye Rate Paths: Markets Wrap, WRAPUP 1-Ukraine steps up diplomacy amid fighting, power outages, UPDATE 1-Abu Dhabi Investment Authority to invest in India's Lenskart - ET, US-Africa Set to Face-Off on Duty-Free Trade Pact at Summit. It was created by Stewart Butterfield, famous in the tech world for starting photo-sharing site Flickr and selling it to Yahoo. The deal is expected to be about half cash and half stock, the. In July, Slack filed a complaint against Microsoft with the European Commission, claiming Microsoft had unfairly bundled Teams with its suite of Microsoft Office work products. It is, as the mighty Anshu Sharma says, the Bloomberg terminal of developers, sales people and marketers. Ron reports that Slack CEO Stewart Butterfield, who joined Salesforce when the company acquired Slack in 2020, . Slack is much smaller than Salesforce whose revenues Benioff aims to more than double to $50 billion, according to CNBC. A deal could . Slack has said it has about 12 million daily active users, and Salesforce on Tuesday said Slack now has more than 142,000 paying customers. Slack has been one of Silicon Valley's legendary stories over the past decade, orchestrating one of the wildest pivots the industry has ever seen. Jemal Countess / Stringer. Salesforce has had its own work collaboration product, called Chatter, since 2010. We've been there. Last year, the London Stock Exchange agreed to buy data provider Refinitiv for $27 billion, though the deal has yet to be cleared by European regulators. A look at the third quarter report of both companies shows just how much. Select 'Manage settings' to manage your choices. Salesforce said it planned to incorporate Slacks communication software into every aspect of its cloud software offerings. Salesforce, which got its start by developing cloud-based software for sales reps, has dramatically expanded its reach in recent years and, along the way, become one of the most valuable software companies in the world, passing Oracle, SAP and IBM as well as other legacy tech companies such as Cisco and Intel. Salesforce is buying workplace messaging app Slack for $27.7 billion, marking the largest acquisition in the San Francisco-based cloud-based company's history. Slack's vision is great but it needs a use case, which Salesforce delivers in the B2B sales context. In September, Mark Hawkins, Salesforces chief financial officer, told analysts that the company would continue to be opportunistic with respect to deals. The acquisition which has not been completed yet would end Slack's run as a public company (it first went public in 2019). Salesforce (CRM) is getting some big work done before year-end. This deal is the strongest signal yet that Salesforce stock has jumped the shark time to take your profits. The purchase marks one of the largest ever for the software industry. Operator: Good afternoon . Through a combination. Now we know. By clicking Accept all you agree that Yahoo and our partners will process your personal information, and use technologies such as cookies, to display personalised ads and content, for ad and content measurement, audience insights, and product development. An earlier version of this article was originally published on November 25, 2020. data, application, and engagement). The company announced on Tuesday that it's buying chat software developer Slack for over $27 billion. Im thrilled to welcome Slack to the Salesforce Ohana once the transaction closes., Salesforce started the cloud revolution, and two decades later, we are still tapping into all the possibilities it offers to transform the way we work. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. This. It also invested $250 million in the data warehousing company Snowflake just before it went public in September. "We have been surprised by the limited success Slack has seen from the pandemic and the rise of remote work," wrote Rishi Jaluria, an analyst at D.A. Salesforce, Inc. (NYSE:CRM) Q3 2023 Earnings Call Transcript November 30, 2022 Salesforce, Inc. beats earnings expectations. Salesforce has agreed to acquire Slack for $27.7 billion. Slack is definitely an excellent enterprise software platform. When the acquisition rumor surfaced last week, Slack stock shot up to just under $44/share, marking the first time the value passed the IPO price of $37.50/share. "Microsoft Teams has been able to capitalize on the opportunity presented by the pandemic better than Slack, in our view, and this rapid growth in adoption has hurt Slack.". Salesforce Is Buying Slack for $27.7 Billion. Ives, who recommends buying Salesforce shares, said Teams "has been a clear hurdle to growth" for Slack and that the market will now be "a two horse race between Microsoft and Salesforce.". Sign up for free newsletters and get more CNBC delivered to your inbox. 3 min read. While Salesforce reported 29% revenue growth in the second quarter, its 2020 forecast in the 21% to 22% range would represent the companys slowest rate of expansion since 2010, according to CNBC. Slack is projected to grow 39% to $876.3 million in the fiscal year ending January 31, according to analysts surveyed by Refinitiv. We, TechCrunch, are part of the Yahoo family of brands. We've lived that life.". The deal, which values Slack at $27.7 billion on revenues of $833 million over the past year, has largely been . Buying Slack would help Salesforces customers make the digital transformation, he said. Massive respect to Stewart Butterfield, and thanks for making liberal arts degrees cool again. Salesforce has a succession crisis. But the slowdown has only fed angst on the Street that Microsoft (MSFT) Teams ascent is weighing on Slacks growth potential. The deal values Slack at over 24 times estimated revenue for next year. Also remember enterprise software market still in early stages for a tremendous growth. Salesforce stock has climbed nearly 40 percent this year, valuing the company at $220 billion. Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. The tie-up between the two is hardly a surprise. On Tuesday, Mr. Butterfield tweeted that Slack would remain an independent and open platform and said its mission had not changed. Slack listed its shares publicly on the NYSE this week with a reference price of $26, which would put it at a value of around $15.7 billion. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. While the company said in September that revenue rose 49 percent to $216 million in the three months ending in July and that the pandemic had created a significant increase in demand and usage of Slack, it also said it did not expect that rise to continue. What Adding Slack To Salesforce Means At nearly twice the price of the 2019 Tableau acquisition, the $27.7 billion price tag on Slack is no small purchase. If Salesforces revenues for the year grow 22%, it will end 2020 with about $20.8 billion in revenue making Slack a mere 4.2% of the total. Marc Benioff, the chief executive of Salesforce. Its unclear when Slack will turn a profit, which is something that has weighed on the minds of Wall Street in recent months. (Photo by Craig Barritt/Getty Images for TIME 100 Health Summit ). So folks are Keeping Salesforce of course, they are. Salesforce, which provides marketing and sales software, among other products, has been highly acquisitive as it looks to grow. Nonetheless, salesforce.com says that its plans to integrate Slack with its own Customer 360 platform will be . In buying Slack, Salesforce now controls all three layers of the modern tech stack (i.e. Taylor was credited as the architect of Salesforce's 2020 deal to buy Slack for $27.7 billion, Salesforce's biggest acquisition ever." Follow this author to stay notified about their latest stories. As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. The acquisition will further intensify Salesforce's rivalry with Microsoft, whose Teams chat and video service has emerged as Slack's stiffest competitor. Slack's failure to update this figure is taken widely as a sign of weak growth. Slack became a publicly traded company last year. Salesforce is making the biggest acquisition in its 21-year history. Whereas Zooms third quarter revenues grew 365% to $777 million, Slacks growth lagged considerably revenues rose 39% to nearly $235 million. The move caps an acquisitive streak by Salesforce and ends Slacks run as an independent publicly traded company. Software giant Salesforce officially closed on its $27.7 billion record acquisition of messaging app Slack Technologies on Wednesday, as the company bets big on a digital work-from-anywhere future."Together we'll define the future of enterprise software, creating the digital HQ that enables every organization to deliver customer and employee success from anywhere," Salesforce CEO Marc Benioff . Would Salesforce buying Slack be an offensive or defensive move? From their late May high for the year to just before the deal speculation, Slack shares were down 25%. Dec. 1, 2020 1:48 PM PT. Salesforce projected that its revenue could reach as much as $25.6 billion in the next fiscal year, almost double the company's performance in the fiscal year that ended about two years ago.. Now with Slack, it provides this incredible credible window into a collaborative interface onto all of our services and the whole enterprise itself, reported CNBC. Slack, which was founded in 2010 by Mr. Butterfield, grew quickly and previously attracted and rejected takeover offers from the likes of Google, Microsoft and Amazon. Salesforce's premium for Slack is in the same range (50-55%), though because it includes both cash and stock, the value of the offer fluctuates in sync with the value of Salesforce's own. Reportedly, the integration with Slack improved Salesforce's Service Cloud case close rate by 26%. In one of the biggest tech mergers, cloud computing giant Salesforce has acquired workplace chat app Slack for $27.7 billion. Marc Benioff, boss of the business software giant . Salesforce is buying Slack using a combination of stock and cash. Salesforce hasn't stopped growing, but importantly, its new bookings are at a low point. Salesforce to Acquire Slack for $27.7 Billion, https://www.nytimes.com/2020/12/01/technology/salesforce-slack-deal.html. A Division of NBCUniversal. I dont see the logic in paying 26 times forward sales or nearly $28 billion for Slack. The lurking competitive issue for Slack in our opinion remains the stalwart out of Redmond. Marc Benioff, the chief executive of Salesforce, was effusive about the combination, calling it a match made in heaven. In a conference call, he said that Stewart Butterfield, Slacks chief executive, and Bret Taylor, Salesforces president, had presented him with the deal. The deal is the biggest bet among a recent spate of acquisitions made by tech companies to capitalize on the shift to remote work. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world. According to the Wall Street Journal, thats a 54% premium to its unaffected price [since the deal was reported before which Slack traded at $30, Slack stock popped 38%] and represents a multiple of about 26 times forward sales., By acquiring Slacks over 130,000 paid customers, Salesforce adds to its enterprise applications portfolio in its competition with Microsoft. On Tuesday, Slack reported that revenue grew 39 percent in the three months ending with October. The Wall Street Journal has reported that Salesforce has made a bid to acquire Slack, the workplace messaging app. Find out more about how we use your information in our Privacy Policy and Cookie Policy and change your choices at any time by visiting Your Privacy Controls. 00:00. Join us as we chat about how evangelizing Salesforce and being an advocate for expanding the use of Salesforce within your company can help propel your career. Erin Griffith reported from San Francisco, and Lauren Hirsch from New York. The CRM giant said Tuesday after market close that it would acquire Slack (WORK) in a cash and stock deal valuing the workplace communications service at $27.7 billion. Indeed, it seems to me that this deal is not about logic but about Benioffs Microsoft envy. The only real question would be how much Salesforce was willing to spend. By clicking "Reject all" you reject all non-essential cookies and similar technologies, but Yahoo will continue to use essential cookies and similar technologies. Data is a real-time snapshot *Data is delayed at least 15 minutes. This matters for CRM stock as the cloud company . Get this delivered to your inbox, and more info about our products and services. 2022 CNBC LLC. If you plunked down $1,000 at that price, you'd have 129 shares. Slack stock up 26% for the year before deal rumors surfaced last week has been underperforming its cloud peers. Indeed Microsoft has done a better job at turning WFH into a tailwind by adding videoconferencing to Teams and heavily promoting the collaboration service, according to the Journal. Acumen, one of Salesforce's top 10 global partners which has grown to more than 1,000 employees over the last 22 years, is one of few remaining independent cloud . That alone would bring Slack likely to the doorstep of a sustainably profitable business. Without a game-changing product and a lot of capital, he said, youre going to get swallowed up or youre going to fail.. So, why did Salesforce acquire Slack and more importantly, why did Slack decide to sell to Salesforce? First, Salesforce was blindsided by co-CEO Bret Taylor's resignation less than one year after he took the job. NEW YORK, NEW YORK - OCTOBER 17: Former U.S. President Bill Clinton (L) and CEO of Salesforce.com and TIME USA owner, Marc Benioff, pose at the TIME 100 Health Summit at Pier 17 on October 17, 2019 in New York City. Salesforce, the CRM powerhouse that recently surpassed $20 billion in annual revenue, announced today it is wading deeper into enterprise social by acquiring Slack in a $27.7 billion megadeal.. Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce's common stock on 30th November 2020. On December 1, Salesforce announced it would pay $27.7 billion mostly in cash to acquire Slack. All Rights Reserved. Salesforce has signed a definitive agreement to buy Slack for $27.7bn in cash and stock, and plans to make the collaboration tool the interface for Salesforce Customer 360, the system it sells to create a single customer ID and profiles. Now the messaging app is a part of the cloud giant's suite of enterprise software that provides . With last year's purchase of Tableau, Salesforce jumped into the data visualization market, taking on Microsoft's Power BI. Rishi Jaluria, an analyst at D.A. Arvind Krishna is a close friend of mine and he believes that bringing Salesforce and Slack together is key for IBM to become even more connected, more productive and more innovative. As part of Salesforce, Slack will be positioned to accelerate and extend its mission to make work life simpler, more pleasant, and more productive. That comes to about $45.86 a share. If completed, the acquisition will end Slacks brief run as an independent publicly traded company it went public in mid-2019 and cap an acquisitive streak by Salesforce with its largest deal since it was founded 21 years ago. The Slack buy positions Salesforce against Team, a much stronger Microsoft collaboration product. If you plunked down $1,000 at that price, you'd . On December 1, Salesforce announced it would pay $27.7 billion mostly in cash to acquire Slack. Roughly 90 percent of Slacks enterprise customers also use Salesforce. The deal pits Salesforce against Microsoft in yet another market, with the companies already going head-to-head in sales software, data visualization and productivity tools. SAN FRANCISCO Salesforce said on Tuesday that it would buy the workplace software company Slack for $27.7 billion in cash and stock, the latest in a wave of deals as the coronavirus. San Ramon, Calif.. - Business software pioneer Salesforce.com is buying work-chatting service Slack for $27.7 billion in a deal aimed at giving the two companies a better shot at competing . Tiny Speck's game, Glitch, was a failure. The companies also go head-to-head in productivity software, though Microsoft's Office suite controls the market along with Google. While everyone circled around the Slack news, most people completely missed Salesforce's announcement that same day that it planned to acquire Acumen Solutions for $570M. List of the Largest Salesforce Acquisitions Slack - $27.7B Tableau - $15.7B MuleSoft - $6.5B Demandware - $2.8B ExactTarget - $2.5B ClickSoftware - $1.35B Vlocity - $1.33B Krux - $800M Quip - $750M Buddy Media - $649M 1. CRM is a Strong Buy, based on 20 Buy and 5 Hold . Marc Benioff, Salesforces chief executive, told analysts in August that the company was not seeking acquisitions. When youre a scrappy start-up going against an 800-pound gorilla thats one of the most well-capitalized companies in existence, its tough to compete, Mr. Purk said of Slack. Microsoft Teams [ which offers videoconferencing and is given away at no charge to Office software customers ] has been able to capitalize on the opportunity presented by the pandemic better than Slack, in our view, and this rapid growth in adoption has hurt Slack, according to CNBC. We need more firepower.. Photo: Thomas Trutschel/Photothek/Getty Images. But over the course of working on it, Butterfield's team built a product to help them communicate with one another and to share files. Please upgrade to a supported browser, or try one of our apps. Reuters also covered the story citing sources "familiar with the matter". Much of the volatility can be attributed to Microsoft. Reported EPS is $1.4, expectations were $1.22. On the day the S&P 500 bottomed, Salesforce (CRM-1.35%) closed at $7.72 per share. Salesforce to Buy Software Maker Slack for $27.7 Billion (Bloomberg) -- Salesforce.com Inc. agreed to buy Slack Technologies Inc. for $27.7 billion in cash and stock, giving the corporate. For Marc Benioff, chief . CRM "They say time is the one thing you can't buy, but in fact, time is the . Salesforce's annualized revenue topped $20 billion in the fiscal second quarter, with growth of 29%. Salesforce's deal to buy Slack is expected to be announced Tuesday after markets close, sources told CNBC's David Faber. First, the company has seen a cooling in its closely watched calculated billings growth. Slacks slower growth is due in part to the perception that it has not positioned itself well for WFHs potential tailwind the way Zoom and Shopify have. Salesforce, with its vast enterprise installed base, could use its market reach to promote Slack to the world's largest companies in the event the reported acquisition talks lead a deal.. Slack is one of the most valuable competitors in the collaboration market today. Since the news, Slacks value has risen to more than $25 billion. By acquiring Slack, a business chat service with over 130,000 paid customers, Salesforce is bolstering its portfolio of enterprise applications and filling out its broader software suite as it seeks new areas of growth. Shareholders will get $26.79 in cash and 0.0776 shares of Salesforce stock in exchange for each share of Slack, according to Tuesdays deal announcement. Stewart Butterfield, the CEO of messaging service Slack, is leaving the company and that has Salesforce (NYSE:CRM) stock falling on Tuesday. Without Slack, there would have been no Teams. . But the forecast for the full year of 21% to 22% growth would represent the company's slowest rate of expansion since 2010. Salesforce (NYSE: CRM) has confirmed the rumors that started swirling last week. Others soon followed, most notably Slack CEO Stewart Butterfield . We want to hear from you. Personally, I believe this is the most strategic combination in the history of software, and I cant wait to get going.. Watch Yahoo Finances live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. That disparity helps to explain why Slack sold itself this week to Salesforce. Salesforce just picked up Slack for a cool $27.7 billion based on the closing price of Salesforce's common stock on November 30, 2020. What led to Salesforce striking the deal? The opportunity we see together is massive, Slack co-founder and CEO Stewart Butterfield said. Salesforce could help easily scale up Slack to more high-paying corporate customers in a major challenge to the momentum at Teams. Prior to initial reports of a deal last week, which led to a 38% pop in Slack's shares, the stock was trading at under $30. Marc Benioff, founder, chairman and CEO of enterprise cloud computing company Salesforce. In terms of questions, precisely how Slack fits into Salesforce's CRM-and-platform play isn't clear; Salesforce's own Slack-ish competitor, Chatter, hasn't taken control of its market in. Slack is projected to grow 39% this fiscal year, which ends Jan. 31, to $876.3 million, according to analysts surveyed by Refinitiv. It's a seismic move in the workplace collaboration space, which has surged with the rise of remote work and virtual communication. Teams, Microsofts collaboration product, reported 115 million daily users in October, up 50 percent from April. All of the sweeteners of being under the Salesforce umbrella would only strengthen the profit potential of the communications platform. Over the past week or so, at least six top executives from Salesforce and its subsidiaries announced plans to leave, Ashley Stewart, chief tech correspondent, writes. According to the Wall Street Journal, that's . Under the terms of the agreement,. Salesforce said the Slack purchase comes to an enterprise value of $27.7 billion, which takes into account shares outstanding along with debt and cash. Chatter has had limited traction, according to a Goldman Sachs report last week that touted the strategic merit of Salesforce buying Slack. To this point, we believe the company will have significant difficulty further penetrating the core enterprise market and Microsoft installed base given the significant competitive offering from Microsoft's Teams product that could slow growth going forward quicker than the Street is anticipating, despite the COVID driven tailwinds, warned Wedbush tech analyst Dan Ives. Mr. Taylor said the pandemic had fundamentally shifted consumer behavior and the way people work. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Now perhaps Salesforce will be more complete with Slack, covering organisations' front office, back office, everything they ask for. Shares in Slack jumped 37.59% to $40.70 at the close on Wednesday 27 th.This is above the opening value of $38.50 in June 2019 during its IPO, and only slightly below the $42 they reached on that opening . As expected, the companies announced yesterday that Salesforce would pay $27.7 billion, totaling $11.6 . Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce's common stock on November 30, 2020. Salesforce acquired Quip in 2016 but hasn't picked up much momentum against Microsoft and Google. How so? My eyes lit up, he said. The company has loosened contract structures and extended credits to help them out. Last year, it bought Tableau, a data analytics provider, for $15.3 billion; in 2018, it bought MuleSoft, a data integration company, for $6.5 billion; and in 2016, it bought Demandware, an e-commerce software maker, for $2.8 billion. Indeed given how well Nadella has done taking over from Steve Ballmer at Microsoft its shares are up some 484% since he become CEO in February 2014 it would probably be great news for Salesforce shareholders if some like Nadella replaced Benioff. For Salesforce, the Slack deal is the latest in CEO Marc Benioff's multiyear acquisition spree. Benioff and Microsoft CEO Satya Nadella were business friends who turned into rivals, As Bloomberg reported, Benioff was one of the first rivals Satya Nadella forged closer ties with when he took over as Microsoft CEO in 2014, but the executives relationship fractured in 2016 when Microsoft acquired LinkedIn. WATCH: Would Salesforce buying Slack be offensive or defensive? So, why did Salesforce buy Slack? Slack has blamed the slowdown on some of its small business customers being hurt by COVID-19. Pros The reasons Slack is a critical acquisition for Salesforce. Salesforce.com Inc. is in advanced talks to buy Slack Technologies Inc., according to people familiar . (I have no financial interest in the securities mentioned in this post). Opinions expressed by Forbes Contributors are their own. + Follow. Layoffs at some of its customers have hurt its business, the company said. SalesForce will buy Slack for $27.7 billion dollars. First up, this makes a lot more sense than SAP buying Qualtrics did, but then that is a low threshold. Davidson. "As you know, they're basically entering from the $1 billion to $2 billion phase, which I know extremely well, and this is a moment where we can offer a lot of value. Slack provides just enough process to help disseminate ideas. Google, Oracle, Amazon, and Microsoft awarded $9 billion Pentagon cloud deals As Apple's App Store expands price points options, RevenueCat rolls out A/B price testing tools Taylor was credited as the architect of Salesforce's 2020 deal to buy Slack for $27.7 billion, Salesforce's biggest acquisition ever." - WSJ #slack #salesforce https://hubs.ly/Q01v1B3d0 Salesforce just picked up Slack for a cool $27.7 billion based on the closing price of Salesforce's common stock on November 30, 2020. Bank of America served as financial adviser to Salesforce, while Qatalyst Partners and Goldman Sachs advised Slack. The Salesforce deal for Slack shows how competitive the software market has become, said Logan Purk, a senior analyst with financial advisory firm Edward Jones. Andreessen Horowitz, Accel Partners and Social Capital were among Tiny Speck's early backers. In August, Mr. Benioff told analysts that Salesforce was not seeking acquisitions, implying that valuations were too high. In the biggest tech deal of the year so far, Salesforce announced that it plans to buy Slack Technologies provider of the popular workplace-messaging . Published Dec 2, 2020. Slack has a market value of about $17 billion. This is our ultimate vision.. 00:00. Stewart Butterfield, Slacks chief executive, at the companys headquarters in 2017. Slack will continue to be led by CEO and Co-Founder Stewart Butterfield. Combining Slack with Salesforce Customer 360 could be transformative for customers and the industry. It began as tool for volunteer users, generating its user growth through use and network externalities, rather than software sales machinery. The companies are battling in a number of other areas. Through a combination of cash and stock, Salesforce is purchasing Slack for $26.79 a share and .0776 shares of Salesforce, according to a statement. Salesforce CEO Marc Benioff says the Slack Connect digital communications application will integrate with the Salesforce suite of cloud-based ecommerce, marketing, sales, service and analytics software to help companies better serve their customers. The shares debuted on the New York Stock Exchange in June 2019, through a direct listing. Got a confidential news tip? Salesforce is paying $27.7 billion for Slack, according to the press release. Salesforce CEO, Marc Benioff sounds exuberant about this acquisition. Cofounder Marc Benioff is taking increasing control over the company alienating his top lieutenants and dialing up pressure on employees. It caught many off guard as the reasons for the big spend are still being digested. Davidson, in a report last week. Speaking of salesforce, the cloud software giant made it official this afternoon: it has agreed to acquire smaller rival Slack WORK for $27.7 billion in cash and stock ($26.79 per share, at 0.0776 . Daniel Ives, an analyst at Wedbush Securities, calls the Salesforce's possible Slack purchase "an aggressive move" that would be "a major shot across the bow at Microsoft.". They shut down Glitch and focused on chat, opening it up to customers in early 2014. We're very sorry, but your browser is not supported! Slack Acquisition Date: Dec 1, 2020 Purchase Price: $27.7B Today on the Salesforce Admins Podcast, we talk to Brenda Glasser, Salesforce Architect at Ripple and co-leader of the Atlanta Salesforce Architect Community Group. The company was originally founded in 2009 as an online gaming company call Tiny Speck. The company announced on Tuesday that it's buying chat software developer Slack for over $27 billion. Slack's annual revenue topped $100 million by early 2017 and reached $400 million two years later. Slack changes everything and makes Salesforce a whole new type of company. Salesforce.com expects to add value to its suite of business software by agreeing to buy . The CRM giant said Tuesday after market close that it would acquire Slack ( WORK) in a cash and stock deal valuing the workplace. But to watchers of the Slack story in 2020, its one that has left bullish investors wanting for more amid the rampant shift to work from home during COVID-19. Slack will combine with Salesforce Customer 360, which connects all apps in the Salesforce suite, and Salesforce says it will completely change how users communicate and work with their clients. On Tuesday, it said its revenue rose 20 percent to $5.24 billion in the three months ending with October. Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce's common stock on 30th November 2020. Under Mr. Benioff, Salesforce has bought at least 60 companies, including 27 in the last five years, according to S&P Capital IQ. Let's take a look at the largest Salesforce acquisitions of all time. At the same time, Slack has faced increasing competitive pressure from Microsoft. Salesforce has agreed to buy workplace messaging app Slack for $27.7bn (20bn) in what would be one of the biggest tech mergers in recent years. Slacks trajectory reminded him of Salesforces, Mr. Benioff said, and he marveled at the possibilities of combining the two companies data and tools. Slack investors will receive $26.78 for each company share as well as 0.0776 share of Salesforce -- representing a 55% premium to Slack's price on Nov. 24, the day before reports about deal . announced it will pay a whopping $27.7 billion for the business chat service, Slack Technologies. Salesforce said Tuesday that it will buy Slack, the workplace software company, for $27.7 billion in cash and stock. In February, Salesforce paid $1.3 billion for Vlocity, a mobile software provider. Microsoft has offered the software alongside Office since Teams was released in 2017. This is more or less saying: We cant compete with Microsoft Teams anymore. This year, Slacks shares were up roughly 25 percent, though they remained below the level of the companys public market debut, before news of a deal with Salesforce broke last week. Salesforce Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce's common stock on November 30, 2020. Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock (based on the . Salesforce whose stock is up a mere 44.5% in 2020, compared to the Emerging Cloud Indexs 88% pop as of December 1 is paying too much in exchange for too little top-line growth. Customers are rearchitecting how they are work. The company spent $15.3 billion on data visualization company Tableau in 2019 and, a year earlier, shelled out $6.5 billion to acquire MuleSoft, whose back-end software connects data stored in disparate places. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, and reddit. Salesforce is also competing with Adobe, and the latter's pending acquisition of Workfront has similarities to the potential Slack deal. As CNBC reported Microsoft and Salesforce face off in. Along with sharing its third-quarter 2021 results, Salesforce announced that it is buying Slack (NYSE: WORK). Its valuation was about $19.5 billion when it went public last year, but its shares later sank. In July, Atlassian, which sells tools for developers and project management, said it would buy the enterprise services business Mindville for an undisclosed amount. Both companies tried to buy LinkedIn, the professional networking site, but Microsoft was the ultimate winner. Slack shares have had a chilly reception to its past two earnings reports, so Salesforce swooping in at more attractive valuations makes sense. Earlier this week, Salesforce acquired Slack for $27.7 billion. This is a match made in heaven. Teams now has more than 115 million users while Slack has a fraction of that, despite it having the edge in the minds of most in terms of user interface. Prior to Slack, Salesforce's biggest deals were the $15.3 billion purchase of Tableau last year and the $6.5 billion acquisition of MuleSoft in 2018. Other firms focused on workplace collaboration products, including Airtable, Asana, Box, DocuSign, Dropbox and Smartsheet, may also be potential targets as highly valued software companies look to roll up the fragmented market for collaboration tools. Salesforce's Marc Benioff. Anyone can read what you share. Slack has not provided an update on the 12 million daily users it reported a year ago. As a subscriber, you have 10 gift articles to give each month. The work from home (WFH) trend spurred by the pandemic has left Slack in the dust compared to Zoom. With tough competition. Slack has faced competitive pressure from Microsoft. Salesforce.com Inc. agreed to buy messaging company Slack Technologies Inc. in a $27.7 billion deal that shows how the biggest players in cloud computing are racing to add muscle amid the. It caught many off guard . 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